It’s Stealing Their Money.
Governments around the world — Australia, France, Brazil, and now Canada —have fallen in love with the idea of creating a pseudo-copyright system that requires tech companies to pay license fees to news publishers when their users quote the news.
These governments start from the (correct) premise that a vigorous, independent news sector is vital to democracy, and the (likewise correct) premise that there’s something fundamentally crooked in how the tech companies operate, and then draw the (alarmingly wrong) conclusion that the way to solve this is with a “snippet tax” (or, more charitably, a “remuneration right”).
There really is a problem with the news industry and the tech industry. But creating copyrights in what would otherwise be fair quotation of the news is no solution — in fact, it will only make the problem worse, increasing concentration in both the news and tech industries, while undermining the ability of the public (including journalists) to discuss, report, analyze and criticize the news.
Let’s start with what the news is: it’s the thing we’re all talking about. The news is not a secret. If you can’t talk about it, it’s not news.
Where do we talk about the news? For years, a growing fraction of our news discourse has moved online. Pandemic lockdowns and isolation accelerated this process. To a first approximation, our online spaces are our public squares, the places where we reason together and debate about what’s going on in our world.
News publishers want their reporting to be the subject of discussion, of course. News isn’t — and never has been — a passive medium, to be read silently and digested alone.
The fact that social media is full of people talking about the news — quoting it and linking to it — is a feature, not a bug. Likewise the fact that searching for newsworthy topics returns links to the news along with brief snippets that help the reader decide whether to click through, read, and then quote and link in forums where they discuss the news of the day
Every nation’s copyright system has “limitations and exceptions” like Fair Use and Fair Dealing: these are policies that establish some uses of copyrighted work that can take place without the rightsholder’s permission or consent. Foremost among these rights is quotation for the purpose of discussion, analysis and criticism (putting rightsholders in charge of who can criticize their work is a bad idea, for reasons I hope are obvious to you). Quoting the news isn’t a copyright violation, and we should hope that it never is.
But the news is in trouble, and Big Tech has everything to do with it. What is the nature of that trouble, and how do we fix it?
Put bluntly, the problem isn’t Big Tech stealing publishers’ content; it’s that Big Tech is stealing publishers’ money.
The online ad market has been cornered by two companies: Facebook (which calls itself Meta these days) and Google. These companies have taken over the market through a series of illegal actions:
- First, the illegal, anticompetitive acquisitions of rivals, which ensured that privacy-respecting alternatives were gobbled up or put out of business;
- Second, the illegal, creepy imposition of universal surveillance on every internet user, whether or not you used one of these two services;
- Third, the illegal, clandestine creation of secret agreements to rig the market for ads;
- Fourth, the illegal, widespread practices of accounting fraud that let the duopoly siphon off money from advertisers and publishers by lying to both.
All of created a system in which nearly half of the ad revenue generated by publishers’ content is misappropriated by Big Tech, whose monopolies enable accounting fraud and market-rigging. The ad industry is the biggest fraud on the internet. Up to half of ad revenue is trousered by Big Tech. 15% of the remaining ad revenue is just…unaccounted for.
What’s more, the bottom-feeders of the non-Big-Tech ad industry are, if anything, even sleazier than Big Tech itself. Their favorite tactic is to enter losing bids for the right to show ads to high-value audiences (say, Washington Post readers) solely to harvest the ad-identifiers associated with those high-ticket readers.
Then, these also-ran ad companies sell access to those readers on other websites, especially gross clickbait sites like Outbrain and Tabooleh, at prices far lower than advertisers would pay to show an ad on the Post.
That means that every time a high-value publisher runs an auction in the hopes of commanding a higher price from advertisers, it also erodes its own rate-card, by giving sleazy websites a way to undercut the price to show an ad to the very same readers.
The ad-tech market is in serious want of reform. The antitrust cases against Facebook and Google around the world are an important step, but they’re apt to be very long-run processes (the AT&T breakup took 68 years, all told). Thankfully, we don’t have to sit around and wait for breakups to improve the ad-tech market. There are many steps that governments can take right away:
- Ban companies from representing both the “demand-side” and “supply-side” of ad auctions (that is, don’t let companies represent both bidders and sellers in a single transaction);
- Create Sarbanes-Oxtley-style criminal penalties for accounting fraud in ad markets;
- Impose transparency in the calculations of ad fees charged, collected and remitted, backstopped by independent auditors;
- Create high statutory civil damages regimes for fraud, including bid-rigging;
- Mandate open “header bidding”;
- Ban surveillance-based “behavioral advertising,” forcing a switch to “contextual ads” (based on the content of articles, not the traits of readers), which will nullify tech giants’ data advantages;
- Force the tech giants to disclose the criteria they use to prioritize (or deprioritize) news stories in their recommendation and ranking systems.
These are the kinds of measures that will pay all publishers, based on their significance to readers’ lives and discourse. None of this requires creating licenses for the right to talk about the news (and remember, if you can license the right to talk about the news, you can withhold those licenses and prohibit some people from talking about the news).
These measures will create competition in ad markets, making publishers less reliant on Big Tech.
So why aren’t media giants pushing for these reforms? Why is all the action in creating a licensable right to talk about the news?
Because Big Content is every bit as rotten as Big Tech.
Long before the internet, news-media companies were gripped by consolidation. Corporate raiders bought and looted newspapers, consolidating their ad-sales into national call centers (wiping out knowledge of and relationships between the salesforce and local businesses); consolidating reporting (laying off national and state politics reporters, as well as reporters covering issues of general interest —reviewers, science and business reporters, etc); selling off physical plant and reducing local reporting (or eliminating it altogether).
The news media — which had successfully weathered the advent of the telegraph, radio, TV, cable, and satellite — went into the dotcom era with its cash reserves gone, burdened by debt, and vulnerable to price-shocks from the buildings and plant they had sold off and leased back.
Things have only gone from bad to worse. Private equity rollups reduced major metros’ daily papers into skeleton crews operating out of brick bunkers the size of a Chipotle.
The owners of these papers are typically far-right ideologues, offshore vulture capitalists who debt-load their acquisitions, demand government bailouts, and then publish manifestos glorifying “market capitalism” — or turn great papers into side-hustles used to pimp their owners’ online casinos.
The news industry isn’t dominated by patrician media barons committed to the democratic role of the press. The press is a highly concentrated industry whose billionaire owners have raised prices, lowered quality, slashed wages, and waged war on their workers’ unions.
For these media companies, a snippet tax is much better than a fair ad market. For example, Rupert Murdoch used Australia’s snippet tax as leverage to secure a sweetheart deal for his papers from Google and Facebook, while the independent news outlets that serve the regions whose papers Murdoch had bought and shuttered were frozen out.
In France, media giants rigged the snippet tax negotiation so that publishers could only get paid if they promoted Google’s new “Showcase” news product, making their financial futures dependent on Google’s ongoing dominance of news.
Big News correctly understands that snippet taxes are a way to drive cozy, exclusive profit-sharing relationships between Big Tech and Big Content while dooming smaller media companies. By contrast unrigging the ad-market would give those smaller companies a chance to thrive — and threaten the dominance of financialized news monopolists.
Big Tech is the problem with the news. It’s not the solution.
News media is essential to democracy, but so is the right to talk about the news. A snippet tax doesn’t just sideline indie news outlets — it also excludes new tech companies, including co-ops, nonprofits and startups, who might challenge Big Tech’s hegemony and provide better places where we can talk about the news.
Any snippet tax big enough to make a difference to news reporting will also be too expensive for these nascent competitors to afford.
In Europe and Australia, smaller news outlets and individual were tricked by media giants into backing their play. The support of these indies and beloved reporters was key to passing the snippet tax, but it was a desperate gambit. Increasing the revenues of media monopolists does not mean that reporters will get paid more, or that indies will benefit alongside of them.
Unrigging the ad market may sound like a big lift, but indies and reporters won’t have to fight that fight alone. Public sentiment has turned firmly against commercial surveillance, and killing commercial surveillance will take us most of the way to a better ad-tech market.
What’s more, a fair ad-tech market doesn’t require a regulation that lets the government decide who is a “legitimate” news publisher.
But there’s another important ally in the battle for better ads: advertisers. After all, the ad-tech industry doesn’t just rip off publishers — it takes advertisers for a ride, too.
News workers have fallen prey to the same despair that has infected so many writers, musicians, filmmakers and other culture workers: the belief that they have no power on their own, and that the best they can do is root for their own monopolists to wrestle with the tech monopolists, in the hopes that the “good” monopolists will drop a few crumbs as they gobble up their winnings.
But monopolists aren’t the side of workers, or audiences. Our democracy needs a free and open press, and free and open public squares where we can discuss its reporting.
Snippet taxes aren’t about democratic fundamentals — they’re just a way to force two different groups of rapacious monopolists to divide up their ill-gotten gains in a slightly different way.